Production costs deflated by 9,55% in 2022

The Production Cost Inflation Index (IICP) accumulated a deflation of 9,55% in 2022. The Inflation Index for Prices Received by Rural Producers (IIPR) registered an increase of 10,36% in the same period. The data was released by Farsul this Monday, January 23rd.

The fall of the IICP is associated with the supply of fertilizers on the domestic market due to fears that the conflict between Ukraine and Russia could create a shortage of the product in Brazil, which is essentially an importer of the raw material. The decline in the average exchange rate also influenced the result due to the fact that the majority of inputs come from outside the country, meaning that costs are strongly influenced by the exchange rate. The result ends up bringing a scenario that has not happened since 2019, where the IICP retracts while the IPCA registered an increase of 5,79% in 2022.

In relation to the prices received by producers, the increase is linked to the values ​​reached by some products that make up the IIPR, especially wheat. This is despite the stability and even decline of other products compared to the previous year. Even so, the indicator was below the IPCA Alimentos, which closed 2022 with an increase of 11,64%. This demonstrates that consumer prices grew more than those for producers, proving the difference between the values ​​practiced on the shelves and inside the gates. And that the increase in prices is a reflection of the inflationary process faced by the country in the various products and services of the economy.